January 11, 2019

Interview with Rick Perlstein about AOC

by liberal japonicus

I've got a bunch of stuff to put in the previous thread, but I wanted to open up another thread about this interview with Rick Perlstein about AOC.

A pull quote

Well, I don’t think they’re afraid so much for the Democratic Party as they’re afraid for themselves. This is obviously a changing of the guard. When I watch Alexandria Ocasio-Cortez operate with such aplomb and skill and obvious erudition, she reminds me of when people like you and me stood around at a cocktail party or a dinner party and inevitably the conversation turned to, Why are the Democrats where they are? Why don’t they take the fights to the enemy? Why don’t they pivot off troll-y comments from the Republicans, instead of playing the game on their terms? Why aren’t they offering clear, bold, long-term, super-jumbo policy solutions that people can remember instead of triangulating everything the Republicans suggest?

And, suddenly, someone emerges who seems to be listening to all this, who is probably part of those conversations. And, suddenly, she has the power to actually act in a way that the Party hasn’t—a party that, almost forty years later, is still traumatized by the success of Ronald Reagan. It’s a profoundly generational phenomenon, and, clearly, it’s scary.

My point (and I did have one) is not that confiscatory top brackets produce lots of revenue because many of the wealthy will pay at that rate. The data show that such an assertion is simply not true.

My claim is that those brackets are a cudgel that tends to discourage socially-noxious behaviors by corporations and individuals, and channels them into behaviors that increase investment in the common good and tend to slow the growth of wealth inequality.

My claim is that those brackets are a cudgel that tends to discourage socially-noxious behaviors by corporations and individuals, and channels them into behaviors that increase investment in the common good and tend to slow the growth of wealth inequality.

"That's not a small point but it's not just rich people who find ways to avoiding tax hikes. For any number of reasons, since the end of World War II, it has proven exceptionally difficult for the federal government to substantially increase overall revenues for any period of time. The entire country, it seems, has an aversion to paying more than about 18 percent of GDP in the form of total government revenues. Despite very different income tax brackets, corporate tax policy, you name it, it's rare when the feds' take tops 18 percent for very long (recall that both Al Gore and George W. Bush campaigned on tax cuts in 2000, after a series of big-revenue years for the federal government)."Increasing Top Tax Brackets Is Easier Than Increasing Revenue Over Time: Proponents of jacking top marginal income tax rates such as AOC ignore how hard it is to actually boost revenue over the long haul.

First off, it's varied roughly between 15% and 20% of GDP. For a given GDP, that's a difference of a third revenue at 20% than at 15%.

Then there's the fact that GDP isn't fixed. I know Republicans and libertarians and Republican libertarians tend to think lower tax rates make GDP go up, at least partially offsetting the effect of the lower rates on revenue. I don't really dispute that in the shorter term. In the longer term, I'd say productive government spending leads to greater GDP. Think education, R&D, and infrastructure for starters.

In the longer term, I'd say productive government spending leads to greater GDP. Think education, R&D, and infrastructure for starters.

Think of the space program. Think of the Internet. (Just for the R&D part.)

Though I do wish I could, off the top of my head, think of some equally dramatic examples from the last 30-40 years. (I.e. since the huge push to "rein in big government spending.") But maybe someone can help me out there.

Think of the space program. Think of the Internet. (Just for the R&D part.)

Perhaps there would have been greater progress if the government had taken the same approach to space as it did to the Internet. And it's not like something like the Internet wouldn't have existed if the government hadn't supported a particular approach. I was using a globe-spanning data network in 1973 that wasn't part of what became the Internet.

And there's always the question of opportunity cost. Would the resources have been better spent if the government hadn't cooped them?

Benefits have cost. But, on the whole, the benefits of human endeavors have been much greater than the costs. That's how about 99% of the world's wealth was created over the past 200 or so years. But, even when the benefit is greater than the cost, there may be an opportunity cost wherein the benefit might have been even greater if the resources were used elsewhere.

But opportunity costs can be counterfactuals that can't be proven. For example,

If only the government would have coopted collateralized debt obligations and credit default swaps. I guess it did after the fact to prevent a total economic collapse.

is a counterfactual. We mostly have only the word of the "too big to fail" crowd that there would have been an economic collapse if they hadn't been bailed out. Since then, they've become an even greater too big to fail.

I should probably also mention that my point about CDOs and CDSs wasn't that the government bailout was some wonderful thing, rather that the private sector isn't a perfect engine of resource allocation.

CharlesWT: ... on the whole, the benefits of human endeavors have been much greater than the costs. That's how about 99% of the world's wealth was created over the past 200 or so years.

Owing to my prejudice that logic is couched in language and weird language underlies weird logic, I have to ask:

WTF is "wealth" that is NOT the result of "human endeavors"?

If a breathable atmosphere counts as "wealth", I can agree it is not the result of "human endeavors". But then it would be insane to count it as only "about" 1% of "the world's wealth" over any period of any number of hundreds of years. If it does NOT count as "wealth", then maybe our friendly neighborhood Libertarian can cite a different example.

Just to forestall a couple of predictable apologias:
1) Potable water does fall from the sky. Potable water coming out of your faucet is the result of "human endeavors".
2) Gold is a useful material in electronics now and in dentistry once upon a time. Gold ore is just dirt, without "human endeavors". Gold bullion would be worthless as "money", like Confederate bank notes or cowrie shells, except for the "human endeavors" required to pretend otherwise.

In the 80's-90's it was 'computer network time', and there was going to be a computer network. And yet, ARPA certainly had a beneficial affect, and likely inspired much of the 'computer network ferment' of the network variants.

Hard enough to quantify the 'factual', let alone the 'counter-factual'.

Hard enough to quantify the 'factual', let alone the 'counter-factual'.

Quite so. But the burden, IMHO, is on those who argue that something else would have been better.

Either show that it would have actually happened (and been better/faster/cheaper/etc.) or show that what actually happened was so bad that anything else would have been an improvement. But what we have so far (that I have seen) is merely assertion, from ideology, without demonstration. Which doesn't mean that it's wrong. Just that, for the moment, it remains merely an opinion.

What has Al Gore pushed beside climate catastrophes? If you mean the Internet, he did have a role starting in 1987 of speeding up the development of the Internet a tad. Although he should, unlike most politicians of the time, get points for having some idea what the Net was. Or that such a thing existed.

Aside from some government funding, the early history of the Net was a bottoms-up evolution without much input from the government.

the early history of the Net was a bottoms-up evolution without much input from the government.

The networking protocols that constitute the core of the Internet were invented specifically to address the need for electronic communications infrastructure that would be resilient in the face of disaster, most notably catastrophic warfare, i.e. nukes. Every aspect of that requirement was driven by the government.

Initiated by the government, funded by the government, sponsored by the government, to address government requirements.

The HTTP protocol which is the core technology of the Web was developed at CERN to support the sharing of scientific research. Sponsored and paid for with government money.

GPS, email. Government.

I'll spot you PKI.

Seriously, your ideology prevents you from acknowledging basic facts.

And FWIW a shitload of fundamental scientific discovery and crucial invention went on during those thousands of years of human endeavor. We build on what came before us.

I'll admit that the development of the Internet is a bit more nuanced than any of us have been allowing for up to this point.

"What’s important about the Internet is that the OSI standard failed. It’s not the standard of today’s Internet. The government backed the wrong horse, so to speak. Instead, today’s Internet is based on TCP/IP -- a networking standard the government tried to kill off.
...
So who gets credit for creating the Internet? Government? The military? Big corporations? Universities?

The answer is "all the above". The Internet is the product of a free society, everyone working together, and sometimes working at odds with each other. It's a triumph of an "official anarchy".

Government threw money at many networks, including the TCP/IP Internet. TCP/IP was influenced by many things, among them the government. But what government most gave TCP/IP was its benign neglect as it spent its guidance, vision, leadership, and energy on developing the OSI network. This history important. If you believe those who say that it's government's unique vision that created the Internet, then you would naturally believe that the government should continue with their successful strategy of regulating and controlling the Internet. If you believe, as I do, that it’s the product of "official anarchy", then you would agree that government should continue keeping its hands off the Internet."Government Didn’t Create the Internet: People often say that the government created the Internet. This is not true.

And FWIW a shitload of fundamental scientific discovery and crucial invention went on during those thousands of years of human endeavor. We build on what came before us.

But it took a particular set of circumstances in Europe to kick off the industrial revolution.

A question for you, Pro Bono - do [you] object to taxing income above $10M at 70%? I'm not asking if you think it will result in a significant increase in revenue. I'm just asking if you think it's somehow wrong or damaging.

That's a distinctly muted and qualified 'yes'. I think that, in so far as anyone paid the tax, the deadweight loss would be too high relative to the revenue accrued. And I'm not keen on taxes which are paid only by a few people who can't reroute their income.

But that's not the important thing. What matters to me is that politicians shouldn't campaign on populist policies which will plainly not achieve their announced aims. Like "build the wall".

Eliminating tax loopholes, I'm in favour of that. And I'm in favour making it harder to achieve huge incomes. For example by making banks pay to insure their risky activities. And by drastically shortening copyright on highly profitable works.

The term "loophole" has always puzzled me. It implies something accidental, unintended; an ambiguity in statutory language that some clever lawyer gets away with interpreting in a way that reduces the rich client's tax bill.

Is that really what we're talking about? If so, I'd appreciate an example. Don't dumb it down for me; I can handle complexity.

Or are we talking about completely intentional preferences for certain forms of income (cap gains, "small business" profits) or certain forms of expenditure (e.g. lease vs purchase) in the tax code?

OSI/ISO X.25 were all in one bucket of 'deplorable' network options. They were not pushed by the US, but by EU telecoms regulators who wanted a way to "charge by the packet".

Sure, EU telecoms are close to 100% government-owned, but do you really think if Comcast could figure a way to 'charge by the packet' they wouldn't be all over it? It was very much a 'commercial' POV that pushed OSI/ISO.

If you believe those who say that it's government's unique vision that created the Internet

I think it might be useful to be specific about what is meant by "government created...".

"The internet" is a collection of protocols, practices, and infrastructure that developed over, let's say, the last 40 or 50 years. The folks who "created" it were mostly engineers, scientists, and academics. Most of the folks involved in the fundamental protocols that won the day were employed, directly or otherwise, by one or another government agency. Mostly, DARPA.

Over that period of time, a variety of networking technologies came and went. These days, I think it's fair to say that the protocols sponsored by DARPA and developed largely at BBN and Stanford have become the standard. TCP/IP, DNS. I would say that the reason they have prevailed are (a) their focus on resilience and graceful handling of failover - motivated by US government requirements - are enormously attractive, and (b) they come largely unencumbered by proprietary baggage. They are curated by the IETF, itself initially created at government initiative, but now largely independent.

Oddly enough, the security protocols that have become standard - SSL and now TLS, SSH, public/private key PKI - were mostly private and academic initiatives, although government involvement there is also a reality. For good or ill.

There are folks here whose understanding of this history is deeper than mine, kindly step in and correct what I've said here as needed.

It's not my position that "the government's unique vision created the internet". It is my position that government initiative, requirements, and money, were instrumental in the creation of the internet that we have now. And, absent that government engagement, whatever "internet" we would have now would not be, remotely, as open, reliable, and interoperable as it is. Because infrastructure developed primarily by, and for the interests of, private actors tends not to be.

it took a particular set of circumstances in Europe to kick off the industrial revolution.

Yes, and many if not most of them were not specifically technical or scientific.

I don't disagree that the industrial revolution was an enormous inflection point in human culture. For good or ill, mostly a mix of both - frankly, we and a hell of a lot of our fellow creatures will be lucky to survive it. But the technologies and theories applied were in many cases ancient.

The folks who "created" it were mostly engineers, scientists, and academics. Most of the folks involved in the fundamental protocols that won the day were employed, directly or otherwise, by one or another government agency. Mostly, DARPA.

It may also be relevant that the guys "creating" it were generally working to government specs, whether they personally were employed by the government or not. Much like the innovations that came out of the space program were often done by folks in the private sector who were looking to meet government-written requirements.

The situation with IETF is interesting. As you note, many security/encryption standards started life as private or academic initiatives. But they still had to get adopted by IETF. And I suspect that few here know how IETF actually works.

First, membership is basically self-selected: anybody can show up and participate. Obviously it helps, financially, if you have an employer who will spring for the travel money.** Especially since meetings bounce all around the globe. But individuals who are independent consultants do show up as well.

Second, decisions are taken by "rough concensus". They literally sit in a room and hum. Yes, hum! Loudest hum prevails.

As with any professional organization, you have to convince others of your abilities. The technical fights can be vigorous, especially when non-technical criteria are involved -- e.g. is privacy or the ability to track criminal(/terrorist) activity more important? (That's what the fight over TLS 1.3 is all about. That and the ability/need for organizations to protect their networks from attack.) And there's nasty personal politics involved, too.

I'm aware of all this because my boss got involved a few years back. Can you tell she has been venting to me about it ever since.

** Lately, there have been large numbers of attendees who work for various Chinese companies. Far more than come from similar sized Western companies. Which matters, if you look at how decisions get taken and consider what their employers' agendas might be.

There really isn't anything the government does all by itself. What I'm taking away from this discussion is that, to the extent that the government "does" things, in concert with other actors - as is usually the case - the government had a very large role in the internet as we now know it being what it is.

The involvement of other entities in any government-supported endeavor cannot be presented as proof that the government didn't do anything, unless you're willing to propose that the government never does anything. If you are willing to make that proposition as a libertarian, you should be super thrilled that things are going the way you would like them to.

I was using it as shorthand for all the ways people with very high incomes can avoid taxes.

When your income is very high, you have the advantages that you don't need much of the money right now, and that you can afford to pay accountants and lawyers to work out how to structure your income to reduce your tax liability. The result is that well-intentioned asymmetries in tax law can become loopholes for the very rich.

Here's a piece which includes quite a lot about the Trump family's tax-avoidance schemes. I'd probably be in favour of high tax rates on very high incomes iff Trump pays them.

She may have been "pressured" but she didn't have to do it. It's a lifetime appointment. She deferred to Rehnquist because she was a Republican from Arizona and his pal. She shouldn't have stepped down if she wasn't ready - that's on her.

Pro Bono: I was using it as shorthand for all the ways people with very high incomes can avoid taxes.

Per that NYT article, downright cheating seems to be the main way. Declaring that the apartment buildings you gave your kid were worth $10M, when an arms-length buyer would have paid $100M for them, is not a "loophole".

Now, buying $3.5M worth of chips at your kid's casino and sitting on them may well be the sort of thing that fits my understanding of "loophole", w.r.t the gift tax. Any eccentric old billionaire is entitled to buy casino chips and just play tiddlywinks with them, after all. But I think we can agree it's not a widely exploited loophole: there can't be very many billionaires with ne'er do well sons who lose money running casinos :)

Sorry, sapient, I prefer to defer to Harris and Lithwick on this than to you.

No need to apologize, Nigel. I'm a big fan of Lithwick (although I don't follow Harris enough to say that about her). I just know that a Supreme Court Justice doesn't need to be bullied out of office. In the end, O'Connor was a good Republican.